Shareholder Update – Coldry Demonstration Plant ‘Construction Ready’

Environmental Clean Technologies Limited (ASX:ESI and ECT or Company) is pleased to advise that engineering firm Arup has completed the design and engineering for our Coldry demonstration plant to ‘construction ready’ status.

The delivery of this significant milestone brings to conclusion an extensive series of design and engineering work packages commenced in November 2011 and provides the comprehensive basis for an experienced constructor such as McConnell Dowell to commence construction of the Coldry Demonstration Plant targeted for deployment adjacent to Loy Yang mine and power station in Victoria, Australia.

Managing Director, Ashley Moore stated, “We have now completed a two year engineering program, which has delivered a key outcome for the Company and its shareholders. We are ready to commence the next stage of our growth, which is to demonstrate Coldry technology at commercial scale through construction of the Commercial Demonstration Plant (CDP).

The core design is our company’s principle asset. It is the realisation of the Intellectual property embedded within our Patents, and also represents the gateway to our next target technology – MATMOR.

The Core technology package is transferable globally, allowing us to address multiple opportunities in addition to its intended focus, the Victorian project. Specifically, it allows us to access with confidence the Indian market, both in terms of Coldry project development, as well as critical component sourcing.

The modular nature of Coldry technology allows key project components to be fabricated anywhere, & shipped to site for assembly. Sourcing interest from low cost fabricators can now begin in earnest.

Delivery of the CDP is our number one objective.”

Background

The commercialisation of the Coldry technology has followed a step-wise process involving extensive pilot plant development activities since 2006, preliminary feasibility studies in 2008, and the acquisition of the Intellectual Property in 2009. Recognising the need to demonstrate prior to commercial-scale deployment the Company re-organised its priorities and, under the leadership of Chairman Mike Davies, focused on delivering the engineering work needed to deliver on the key objective of Coldry commercialisation; the demonstration plant.

Arup commenced work in November 2011 and has progressed through several phases as follows:

Pilot plant operational validation and data gathering

Options development focusing on cost and efficiency in terms of Capex and Opex

The engineering and design phase of Coldry commercialisation has been completed on time and under budget.

The Company has formally reviewed and accepted the full design pack from Arup, allowing construction of the plant domestically or internationally.

Next Steps

The Company is eagerly awaiting several key outcomes in its capital management activities ahead of progressing to the construction phase for the CDP.

In addition, the design work, at current advanced levels can be deployed internationally with some suitable customisation to local conditions.

As flagged in our ASX announcement on the 1st of August 2013, progress toward Coldry deployment in India is gaining momentum and will benefit from the completed engineering work on two fronts:

1) Local deployment:

India has significant lignite reserves in Tamil Nadu, and in Gujarat & Rajahstan

ECT are in discussions with Neyveli Lignite Corporation to demonstrate Coldry

2) Local fabrication:

India provides the opportunity for quality, lower cost fabrication of significant components of the Coldry plant for both deployment in India and globally.

Capital reduction opportunities in India of up to 65% compared to a fully Australian sourced & constructed project in Victoria

Acknowledgements

This is a major milestone for the Company and as such the Board would firstly like to acknowledge the support and vision of Arup, McConnell Dowell and JC Steele in their relentless pursuit of excellence and hands on support in delivering these engineering outcomes.

Next, the support and patience of our shareholders without which none of this would have been possible.

Lastly, the Board would like to acknowledge the leadership of Chairman Mike Davies, who assumed the reins of the Company at a crucial juncture in its journey and drove the strategy to deliver this important milestone.

Chairman’s Retirement

The Company also announces the retirement of Mike effective today, having led the completion of this significant outcome for ECT’s shareholders.

Mr Davies stated “We have delivered a major milestone in our commercialisation pathway, and I feel it appropriate to now pass the leadership role to ECT’s next generation. I thank the Board for their considerable drive and support and acknowledge the instrumental work of Managing Director Ashley Moore in delivering on this objective. The company is now better positioned to advance, and deliver shareholder value than at any time in the past.”

Managing Director Ashley Moore noted, “ECT has a new foundation. On behalf of the Board I thank Mike for providing his guidance to deliver on that in addition to his valuable business development efforts in Japan and South Korea, which we will continue to build upon.”

The Board will announce the appointment of a new Chairman as soon as the appointment has been concluded.